Exxon finalises Japan deal for PNG gas project

Tue, 12/22/2009 - 03:05 EDT - France24.com - Business

Energy giant Exxon Mobil Tuesday said it had finalised an agreement to supply Japan's Osaka Gas from its 15 billion US dollar liquefied natural gas project (LNG) in Papua New Guinea.United States-based Exxon said the contract was for the supply of about 1.5 million metric tonnes of LNG a year from the development for 20 years, bringing the conditionally approved project closer to realisation.

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TORONTO – Canadian liquefied natural gas exporters are scrambling to secure investments and sewing up deals with end customers as the window of opportunity closes.
“We have a window of opportunity with the supply-demand balance closing between 2017-2020, it is really about securing markets in 18 to 24 months,” said Michael Culbert, CEO of Progress Energy, which has proposed an Pacific NorthWest LNG project on the West Coast.

Energy giant Exxon Mobil Tuesday approved a 15 billion US dollar liquefied natural gas (LNG) project in Papua New Guinea, potentially the largest ever such deal for the impoverished Pacific country.The venture's United States-based lead partner said the green light was conditional on securing binding contracts with two more Asian customers and finalising financial arrangements, expected by early 2010.

Once upon a time, in a world in which oil was costly and energy sources seemed scarce, the International Energy Agency, a think-tank for countries which import fossil fuels, produced a special report heralding a "golden age of gas".

United States energy group Exxon Mobil Monday said it had reached an agreement with Tokyo Electric Power Co. Inc. to supply it with gas from its Liquefied Natural Gas (LNG) project in Papua New Guinea.Under the binding agreement, the PNG LNG Project to be operated by Exxon would feed the Japanese company some 1.8 million metric tons of LNG each year for 20 years, it said.The project plans to develop gas fields in Papua New Guinea's Southern Highlands and Western Province and transport the gas via pipeline to a LNG facility near Port Moresby for shipment overseas.

ExxonMobil Corp. (XOM) announced that its Papua New Guinea liquefied natural gas (LNG) project is producing at full capacity. The project is one of several projects that the company is engaged in, with many more in the pipeline.
The Papua LNG plant reached full capacity operation earlier than expected. According to a report published by Citigroup Inc. (C), the plant was expected to come to full capacity by the end of the year.

With ExxonMobil’s announcement that its joint venture-led Papua New Guinea’s Liquefied Natural Gas (PNG LNG) has started production ahead of schedule, there is officially a new LNG supplier to Asia. The $19 billion plant will supply 6.9 million tons per year (mtpa). Not surprisingly, nearly all this gas has been contracted. Of the 6.9 mtpa, 6.6 mtpa has been contracted to Asian buyers, including: TEPCO (~1.8 mtpa) and Osaka Gas (~1.5 mtpa) from Japan, CPC from Taiwan (~1.2 mtpa) and Sinopec (~2.0 mtpa) from China.

U.S. companies hoping to export natural gas are frustrated by lengthy delays and rule changes as they await U.S. Department of Energy approval of their applications and may turn to the courts to speed up the process.
Both the slow pace of decisions on applications to ship U.S. liquefied natural gas abroad and the process for making those decisions could be challenged, legal sources say.